How to Stop Foreclosure on Your Home
If your lender has started to foreclose on your home, you are probably panicking. That is, if you're not in denial. You feel like the rug has been pulled out from under you and there's no one there to catch you when you fall.
There is very little in life that can cause as much stress as going through a foreclosure. As you're examining your options and deciding on the course of action you need to take to save your home from foreclosure, take a deep breath. Your situation is not hopeless. It just seems that way right now.
If you are willing to face the fact that you are in trouble and take action, you may very well be able to save your home from foreclosure. Don't just sit around waiting to see if the bank will really kick you out of your house. They will. Here are some tips to help stop foreclosure on your home.
Negotiating with the Bank
It might be worth a try to work with the bank to try to work out a loan modification. Some banks will work with you to help you try to keep your home. However, there are other banks that will not do loan modifications at all. The only way to find out is to ask. If your bank will work with you, a loan modification can help you get back on track with your mortgage and help stop foreclosure on your home.
Refinancing to Stop Foreclosure
When you refinance, you are getting a new loan and using it to pay off the old one. So when you refinance, the foreclosure refinance pays the old mortgage off completely and you start all over paying payments to your new lender, under new terms. If you are able to refinance, it is a good way to save your house from foreclosure. Just make sure your new loan has a lower payment so that you will be able to keep up with them this time around.
Selling Your House
Although you probably don't want to think about selling your house, it is better to sell and use the money to pay off your mortgage than to allow your home to be foreclosed. At least this way, the debt will be paid off without completely destroying your credit. Make sure you list your home for a low enough price, if possible, that it will be likely to sell quickly. Avoid going too low, though, or people might assume there is something wrong with the home.
The biggest drawback to this option is that it can take a long time for a house to sell once it is listed.Check the foreclosure laws in your state to find out how much time you have before deciding whether this is a realistic option.
Using Bankruptcy to Stop Foreclosure
Bankruptcy can be an effective tool when used properly to stop or delay a foreclosure. You will need to talk to a bankruptcy attorney to determine whether filing for bankruptcy will do you any good. It depends on your total financial situation, not just the situation with your house. Filing for bankruptcy is an option that can sometimes help stop foreclosure if the circumstances are right.